Industry 5.0 and the Supply Chain

Next generation supply chain optimization will pair both smart, interconnected digital environments with the human insight it takes to make the most out of them.

In my role, I get to meet a lot of people with a range of interests in optimizing various aspects of their supply chains. Typically, we’re trying to solve very specific problems involving anything from automation and integration to sourcing strategy or order processing efficiency. So I don’t often get to discuss supply chain schools of thought at a 20,000-foot view. That’s what I’d like to do today. Specifically, the concept of Industry 5.0 and the power it has to help keep supply chain initiatives focused on the right things for more customization, resilience and efficiency.

Wait, what was Industry 4.0?

The implementation of an “Industry 4.0” vision is where most supply chain stakeholders spend their time these days. The Fourth Industrial Revolution was actually a concept that had its origins with the German government in 2011, and an initiative around digitizing and connecting physical objects with the real world to enhance industrial productivity and flexibility.

The movement has since grown to encompass industrial enterprises connecting several smart technologies in a comprehensive digital transformation including not only IoT but also rich data analytics, cloud computing, RFID, robotics, AI, machine learning, blockchain, mobile tech and a host of other contemporary technologies. The COVID-19 pandemic helped galvanize a number of Industry 4.0 implementation initiatives, as industry struggled to overcome supply chain constraints, do more with fewer people and enhance automation.

Industry 5.0: Power to the People

The latest Industrial Revolution, and the one I feel has the most potential to truly optimize supply chains in a strategic way, is the fifth. Industry 5.0 seeks to take these highly automated, connected and intelligent digital ecosystems and pair them with a human touch. This means leveraging the human element in a way that helps customize end-user experiences, optimize workflows, etc.— getting the best from both the people and technology involved in the process.

Human intelligence will work in an empowered way with cognitive computing and intelligent automation capabilities to enable hyper-personalization. Computing techniques like Machine Learning and Robotic Process Automation can help front line employees increase proficiency and deliver greater value to customers faster. For example, an expert employee can configure a complex order management process so a junior employee can handle the standard cases alone and trigger a request for help/training on less frequent but more challenging situations.

Technologies such as augmented reality, 5G mobile, “co-bots” (collaborating robots), automated drones, 5G, next-generation AI, working exoskeletons and more could come together to pair human vision, insights and creativity with the enhanced efficiency of technology. All with an eye toward creating a hyper-customized solution that adds more value to the customer. Consider a bicycle manufacturer able to leverage photo app data to more accurately size and price a tailor-made bike so it’s a perfect fit—and then route the production order to the best low-cost automated fabrication facility for the specified frame material and delivery location.

5.0 and the Supply Chain

When people hear about Industry 5.0 they often think about things like next-generation auto manufacturing, armies of autonomous trucks or high-tech, robot-assisted surgical theaters. And, no doubt, the applications we’ll see in our lifetime will be amazing. But I feel like this movement will be especially powerful supporting logistics and supply chain applications.

As an industry, we’re getting better and better at Industry 4.0 implementation and optimization — and doing it at scale. From delivering never-before-seen levels of supply chain visibility to streamlining every aspect of the transaction and transportation. We have more data than ever before, and more robust ERP systems to help make sense of it. But here’s the thing: supply chains are, at the end of the day, about people.

And while this next generation of supply chain solutions is still in the making, deploying Industry 5.0 technology to empower digital supply chain participants holds the promise of helping people across the supply chain fulfill their potential. This could mean:

  • Bringing more customization to a supply chain, improving not only customer satisfaction but also efficiency and margins.
  • Reducing supply chain risks and waste based on more current information.
  • Enabling supply chain and logistics functions to spend more time on strategic experimentation and less on fighting fires or matters of basic execution.
  • Improving supply chain integration for more strategic partnerships.
  • Getting more value from an organization’s human capital, helping to retain and transfer knowledge around a particular supply chain’s characteristics.

At the end of every supply chain is a buyer, and it’s still their world. We can streamline our business relationship with them, but we can’t always anticipate where their passions will lie in 10 years. We might be able to automate quality control protocols that give digital proof of testing and inspection; but we can’t automate the feel of craftsmanship that comes with buying something handmade. We may be able to automate and connect third-party logistics (3PL) operations like never before, but those companies still have leadership whose strategies, values and resources must be aligned with other stakeholders.

Logistics is about empowering people, both as organizations and individuals. And if 2020 has shown us anything, it’s that people are a key part of helping them live up to their potential. Now, with the promise of Industry 5.0, we’ll see how far we can take supply chain productivity and efficiency with more, and better, technology than ever before working right alongside us.

Gary Neights is Senior Director, Product Management at Elemica.